Business Environment Profiles - New Zealand
Published: 11 June 2024
Import duties on apparel manufacturing
10 Percentage
0.0 %
This report analyses import duties for apparel in New Zealand. Apparel refers to all clothing and accessories, including knitted or crocheted and not knitted or crocheted garments. The rate includes all goods subject to a tariff. However, goods that are not taxed or originate from countries that have partial or full free trade agreements with New Zealand do not incur import duties. The data is sourced from the New Zealand Customs Service (Te Mana Arai O Aotearoa) and represents the tariff rate as of June.
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IBISWorld forecasts the rate of import duties on apparel manufacturing to be kept steady at 10.0% during 2024–25. The last textile, clothing and footwear (TCF)–related tariff reduction to occur was in July 2009, when import duties on apparel were reduced from 12.5% to 10.0%. The rates are imposed by government legislation and are set years in advance. The New Zealand Central Government has pursued a general reduction in tariffs since the late 1980s, including lowering tariffs on textile, clothing and footwear. TCF-related tariffs were reduced to 17.0% in July 2006 and fell in each proceeding year to 10.0% in July 2009. TCF-related tariffs have since been held at 10.0%. On 28 February 2022, the UK signed a free trade agreement with New Zealand. Under the agreement, tariffs of up to 10.0% on clothing and footwear were removed.
The reduction in tariff rates until 2009 has contributed to a significant increase in clothing and footwear imports over the past decade. This trend has had a significant effect on the overall apparel market. Retailers and wholesalers have been able to source products directly from overseas manufacturers at a cheaper cost, supporting retail operations and limiting purchase expenses. However, local clothing producers have struggled with an influx of low-cost imports and have been increasingly unable to compete based on price because of high domestic wages and rent expenses. As a result, many domestic manufacturers have shifted production offshore over the past five years.
Import duty rates for leather apparel, like jackets, gloves and other accessories, can vary but are generally modest. These rates typically range from 0% to 10%, depending on the specific item, classification and country of origin. Products imported from countries within established Free Trade Agreements (FTAs) may benefit from significantly lower or zero tariff rates, provided they comply with the Rules of Origin criteria. New Zealand signed an FTA with China in 2008. This agreement has reduced tariffs to 0.0% on most imports from China, including clothing and footwear. China remains New Zealand's largest trading partner, with two-way trade totalling $40.31 billion in the year ending December 2022. The value of Chinese apparel imports has increased dramatically since the FTA was signed. Countries listed as 'least developed countries' attract a 0% tariff on apparel imported into New Zealand. This includes Bangladesh, which has emerged as a large exporter of cheap apparel to New Zealand. Also, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) took effect in December 2018. This FTA involves Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. New Zealand's commitment to FTAs has made remaining TCF tariffs largely irrelevant, as most apparel imports into New Zealand originate from countries exempt from apparel tariffs. China and New Zealand are also participants in the Regional Comprehensive Economic Partnership (RCEP), which came into effect on January 1, 2022. IBISWorld forecasts the rate of import duties on apparel manufacturing outside of FTAs to remain steady at 10.0% over the five years through 2024-25.
IBISWorld forecasts import duties on apparel manufacturing will remain stable at 10.0% in 2025-26...
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